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MoneyWatch: Managing Your Money
Updated on: October 3, 2022 / 12:32 PM / CBS News If you're looking for a safe place to stash extra money for an emergency or more exciting goals like a vacation or wedding, then a high-yield savings account may be right for you. A high-yield savings account is an interest-earning account typically offered by online banks and credit unions that offers a substantially higher interest rate than you'd find with a traditional savings account, so you can earn more than an average savings account and still have access to your money. If you're interested in pursuing a high-yield savings account, start by checking what kind of rates you can earn on your money now. What is a high-yield savings account?A high-yield savings account functions like another other savings account. When you deposit money in a savings account, the bank pays you compound interest to keep your money parked there. When you earn interest during one period, the bank deposits that money into your account. Then the next period, your account earns interest on your new account balance and the growth snowballs over time. The rate of compound interest your account earns over a year is expressed as the annual percentage yield, or APY. Here's a breakdown of the amount of interest you might earn with a standard savings account versus a high-yield savings account:
Keep in mind, savings accounts have variable interest rates that are always fluctuating. Generally, your account's APY may rise when the Federal Reserve hikes interest rates and fall when the Fed lowers them. The Federal Reserve has increased the federal funds rate several times this year, so it's a good time to open a high-yield savings account. Lenders are available to help you get started today. What is the difference between a traditional savings account and a high-yield savings account?The key difference between high-yield savings accounts and regular savings accounts is that high-yield savings accounts may earn you more money. Currently, the national average interest rate for savings accounts is 0.10% APY, according to the Federal Deposit Insurance Corporation (FDIC). By contrast, a competitive high-yield savings account might pay 1.75% APY or higher, over 17 times higher than the average interest rate for traditional savings accounts. How to choose a high-yield savings accountThere are a few essential factors to consider when choosing a savings account, including:
Types of high-yield savings accounts to considerA high-yield savings account isn't the only place to park your money for higher returns than traditional savings accounts. Other alternatives you might consider include:
As you compare high-yield savings accounts and other account alternatives, think about which option best meets your financial needs and goals. Have more questions about this sort of savings account? Not sure if it's the best option for you? An online financial advisor can help steer you in the right direction. Pros and cons of high-yield savings accountsAs with any financial product, it's important to weigh the benefits and downsides before making your decision. Pros
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Thanks for reading CBS NEWS. Create your free account or log in Please enter email address to continue Please enter valid email address to continue Which Bank gives 7% interest on savings account?The average monthly balance requirement is Rs 2,000 to Rs 5,000. Ujjivan Small Finance Bank is offering interest rates up to 7 percent on savings accounts. Equitas Small Finance Bank is offering interest rates up to 7 percent on savings accounts. The average monthly balance requirement is Rs 2,500 to Rs 10,000.
How much interest does $10000 earn in a year?Currently, money market funds pay between 0.85% and 1.05% in interest. With that, you can earn between $85 to $105 in interest on $10,000 each year.
Where can I get 5% interest on my money?Here are the best 5% interest savings accounts you can open today:. Current: 4% up to $6,000.. Aspiration: 3-5% up to $10,000.. NetSpend: 5% up to $1,000.. Digital Federal Credit Union: 6.17% up to $1,000.. Blue Federal Credit Union: 5% up to $1,000.. Mango Money: 6% up to $2,500.. Landmark Credit Union: 7.50% up to $500.. Is a highIf you have any extra cash after covering your basic necessities and bills, you may want to consider putting it into a high-yield savings account. With a high-yield savings account, you can earn more interest while still having access to your cash when you need it.
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